Legal Tech

Technological applications are standardizing, automating, and ‘productizing’ what were once labor-intensive tasks performed by lawyers at law firms. Legal
services -like so many other industries- will be transformed by tech-enabled, process driven, client centric providers.

Rapid change in many sectors!

Intensive digitization of large parts of the economy is underway. New knowledge can be reused without any cost and
enhanced by network effects. The pace of change and conversion pressure will be high in each affected sector, business opportunities and business models are
created and destroyed at high speed. Globalization and new communication platforms enable companies to launch products and services in a global marketplace
in a short period of time.

This is the challenge in the legal sector

As far as the legal sector is concerned, the way to organize the division of labor between different players is
governed to a large extent by transaction costs. If the technology changes, transaction costs will also change, which will change the competitive situation.
Insofar as established actors are unable to recapitalize and reorganize their business, they will largely be replaced by new service providers for the
benefit of the customers in a creative destruction process.

Declining transaction costs also affect the size of the companies and the amount of jobs. At the same time, increased productivity will increase demand for
work. Simple routine job and encodable tasks disappear while demand for problem solving and creativity increases. Less qualified legal work with more
repetitive elements will be automated or, as far as possible, moved to other countries (Legal Process Outsourcing). The qualified, creative legal
information that is difficult to digitize or where qualified legal and personal services are requested will remain. However, even qualified legal work will
change through greater use of different types of analysis tools as part of the work. Digital technology and developments in artificial intelligence allow
for the collection and analysis of huge amounts of data. In some cases, they may be used by other automated systems and production processes.

In other cases, however, the possibilities of big data and artificial intelligence are a complementary tool for better, faster and more informed decisions.
Implementing digital technology also requires a partially different business model where employees are given a different and extended responsibility.
Tomorrow’s day demands that employees be responsible, initiative-oriented and persistent.

Predictions for the legal sector

Fixed price for specified tasks increases, current account decreases

Price competition increases; services have become easier to compare between the various competitors and customer therefore press legal fees

High standardization, especially for routine tasks

Digital working methods throughout the flow increases

Legal documents created largely by the customer based on standardized templates and digital platforms/instructions. Less complicated legal information
and advice is offered basically for free

Pains for large- and midsize companies

High legal costs

Insufficient control and compliance

Barriers to business

Inability to track work and communicate effectively between departments and lawyers

Suboptimal contract management

The use of internal lawyers

According to the CEOs, it is the volume of law that makes the greatest cost savings of having internal lawyers instead
of hiring external lawyers